No cartelisation in fixing saving deposit rates: SBI

SBI and its five subsidiaries nearly control 25 per cent of the banking system. (Reuters)

SummarySBI and its five subsidiaries nearly control 25 per cent of the banking system.

to see if regulation is assisting the overall framework.

"I think the same is true for telecom, the same is true for mining, aviation etc.," Gupta added.

On the issue of judicial intervention in business matters, he said while staying a matter is fair legally, the judiciary should be sensitive to cost overruns if a proposal

gets stuck.

"In an economy where 14 per cent is the cost of credit, if a project is delayed by two-and-a-half years, it is absolutely unviable...that is something which is important for

the judicial process to recognise," he said.

Banks have been hit as demand for project finance has reportedly dried up. With corporate loan demand now restricted to working capital funds, banks are now shifting focus on the retail borrowers.

"The fact is that if I move rates by 1 per cent, it costs me a billion dollars. I will never do it. Because nobody else does it, there will always be this question whether this is cartelisation," Gupta said.

Right from the day one, SBI has been maintaining that it will not be the first one to increase rates, he added.

In a discussion on competition regulation at the PwC summit, Gupta said: "It is absolutely within the domain of the regulator to look at anything. But in the short-term, the industry then tends to become tentative when this kind of thing happens."

"I think regulators have done a great job. At the same time, the regulatory action cannot be in the best interest of the industry some times... I think somewhere, we do need to see if regulation is assisting the overall framework.

"I think the same is true for telecom, the same is true for mining, aviation etc.," Gupta added.

On the issue of judicial intervention in business matters, he said while staying a matter is fair legally, the judiciary should be sensitive to cost overruns if a proposal gets stuck.

"In an economy where 14 per cent is the cost of credit, if a project is delayed by two-and-a-half years, it is absolutely unviable...that is something which is important for the judicial process to recognise," he said.

Banks have been hit as demand for project finance has reportedly dried up. With corporate loan demand now restricted to working capital funds, banks are now shifting focus on the retail borrowers.